Gilt yields reduce 53 basis points with no prospect of interest rate rise

15-year gilt yields chart - Based on figures for November 2023

Annuity Rates UK - November 2023 review

The 15-year gilt yields reduced by -53 basis points ending November at 4.60% after reaching a peak of 5.13% in October 2023. Gilt yields were as low as 4.46% before recovering some ground.

The Bank of England decision to leave interest rates unchanged at 5.25% for the third month since 3 August 2023, suggest there is no immediate prospect for an interest rate rise.

Annuity rates have reduced by up to -5.0% on average since the October peak although annuities still remain higher than fourteen year ago and opportunities remain to secure income at these very high levels.

Find related news here:
Annuities peak with falling gilt yields and unchanged interest rates
Pension annuities reduce by -3pc as gilt yields remain volatile

Our benchmark example for a 65 year old using £100,000 to purchase a single life and level annuity remains at a fourteen year high and increased by +1.46% with income of £7,208 pa.

Providers of standard annuities decreased annuity rates by an average of -0.44% for this month and we would expect rates to decrease by -0.13% in the medium term if yields remain at current levels.

For smoker and enhanced annuity providers have increased their rates by an average of -3.13% and we would expect rates to decrease by -0.11% in the medium term if yields do not fall.

Fig 1 below shows the annuity rates changes for the whole market and the proportion that have either increased, decreased or or did not change. It also shows the range of the changes of the annuity rates over the last month:

Annuity Rates Changes Increase No change Decrease   17%   4%   79% Increases of: max 2.5%   Decreases of: max -7.0%

Fig 1: Annuity rate changes for the whole market

Fig 2: Change in standard rates last month compared to gilt yields

Fig 3: Change in enhanced rates last month compared to gilt yields